European wine producers bracing for Trump’s big tariffs

CHAMPAGNE

Across wine country in France, Italy and Spain one number is top of mind: 200 percent.

That's because last week U.S. President Donald Trump threatened a tariff of that amount on European wine , Champagne and other spirits if the European Union went ahead with retaliatory tariffs on some U.S. products.

The top wine producers in Europe could face crippling costs that would hit smaller wineries especially hard.

Europe's wine industry is the latest to find itself in the crosshairs of a possible trade spat with the U.S.

Among those concerned is David Levasseur, a third-generation wine grower and owner of a Champagne house in France’s eponymous region.

“It means I’m in trouble, big trouble. We hope it’s just, as we say, blah blah,” Levasseur said. 

“When someone speaks so loudly,” he said of Trump’s 200 percent threat, “it’s about the media buzz. But in any case, we think there will be consequences.”

Like other wine sellers and exporters, Levasseur said that a 200 percent tariff on what he exports to the U.S. would essentially grind to a halt his business in that country.

“It could be a real disaster,” Levasseur said.

Italy, France and Spain are among the top five exporters of wine to the United States.

Trump made his threat to Europe's alcohol industry after the European Union announced a 50 percent tax on American whiskey expected to take effect on April 1. That duty was unveiled in response to the Trump administration's tariffs on foreign steel and aluminum.

Gabriel Picard, who heads the French Federation of Exporters of Wines and Spirits, said 200 percent tariffs would be “a hammer blow” for France’s industry, whose wine and spirits exports to the U.S. are worth 4 billion euros ($4.3 billion) annually.

“With 200 percent duties, there is no more market," Picard said.

In Italy, the wine industry has called for calm, hoping that negotiators in Brussels and Washington can back down from the growing trade spat.

The U.S. is Italy’s largest wine market, with sales having tripled in value over the past 20 years. Last year, exports grew by nearly 7 percent to over 2 billion euros ($2.2 billion).

Strong sales at high-end restaurants, in particular, make the U.S. market difficult to replace, said Piero Mastroberardino, vice president of the national winemakers’ association Federvini.

Mastroberardino’s “Taurasi Radici” red wine, for example, was rated the fifth-best wine in the world in 2023. It sells for around $80 a bottle retail in the U.S., roughly twice how much it costs in Italy, so any tariffs would push it to an “unthinkable price point,” he said.

Wine producers and industry experts in Spain, whose smooth reds are savored by tens of millions of American tourists who visit the southern European country every year, shared similar concerns about prospective tariffs.

“We don't think they have much logic and we hope it never comes to fruition," said Begoña Olavarría, an economic analyst at the Interprofessional Wine Organization of Spain.

Spain was the fourth-largest exporter of wine to the U.S. last year in sales. The wine industry represents about 2 percent of the country's overall economic output,